While speaking at a recent conference, I was asked a really good question from one of the executives of a Component/LBM company. His question prompted me to think about how I would start 2018 off in my articles.
The question was: “Our company does not have an incentive program in place though we arbitrarily reward performance at the end of the year. We are positioned as one of the top two suppliers in our market, and we are profitable though it could be better. But listening to you makes me consider, how do I motivate my team without too much reshuffling of what we have to date?”
I have two answers for you:
1. Have you looked in the mirror lately and asked yourself if your expectations are high enough?
2. TIME TO SHUFFLE THE DECK!
The way the question was worded to me tells a lot—there is already an awareness that this type of thinking, behavior, and performance was not acceptable to the owner. Phrasing such as “we could be better” or “we have opportunity” are indications that improvements can be made.
Continuous Improvement (CI)
You cannot start a project, buy a new automated saw or new auto-setup gantry, and think that your need to continue to improve stops at the purchase. As a business, we are always looking to improve on the service, or bids, or software we use—but when it comes to our component operations or lumber yards, complacency sets in. Continuous improvement is a career-long commitment to improve one day at a time forever. If we say “we’re No. 1” and let that mindset become pervasive throughout the lumber yard and component plant, then we’ll see trouble on the horizon.
We should always be looking at ways to improve at a rate that is faster than our best competitor, or the “industry average”. It may take your competition some time to catch up to you and exceed your “No. 1” status, but a committed team that is thinking and behaving the right way, making constant improvements, creating new services or products, will ultimately allow you to stay at the top of your market. This is part of the message I say to owners all the time, but many times is picked up more quickly at the floor/yard level. You do not need to reinvent the wheel (others in our industry have already done that); you need to change the culture of your team. Coaching them on the importance of each associate in the business taking initiative to apply lean thinking every day—that will lead you and your team to long-term success.
CI by Walking/Observing
Now that we have our thinking/heads in the right place, let’s start reshuffling the deck. We have spent several months talking about the wastes identified in the TIMWOODS acronym. Last month, we even talked about implementing a plant to get rid of the wastes. But, too many times I will come into an operation and hear: “we read about that and I assigned it to my team,” but there was no follow-up. As owners and managers, we get caught up in the day to day and do not spend time, literally time, on the floor, in the design department, or out in the yard, looking at how our team is processing material or an order. We cannot just make a quick walk with the real intent of getting back into our four walls with a door and resuming what we were doing.
Schedule time each day to do a Gemba walk, where you are interacting and observing a specific area of the operation. Spend several minutes (10-15) watching a process or work cell to see what is occurring. Take notes, make a recording, do what you need to identify how “X” is being processed. Then share those notes or recordings with the team in that cell, and ask how we can improve upon what we are doing today. Gather the ideas, see if you can devise a solution(s), and then develop and implement a CI plan using the tools Lean provides. Then, go back to see how it is working! Are you getting the improved results you expected? Is there actual improvement in the metrics?
Make Some Bold Moves
A common waste I see in component plants, millwork operations, and lumber dealers is the downfall of Material. Material waste can be an uncontrollable area to some, or an opportunity to others. Reducing scrap can be a great opportunity to improve costs. Because we process lumber in a number of ways and try to reuse what we can, we do not always track the actual cost of that waste. So as a manager/owner looking at my P&L every month, I may not see the actual shrink in inventory or cost because it is somewhat hidden. Or, we downfall material and do not get it back into a position fast so it can be reprocessed. How many companies have carts, yes carts, or pallets of downfall sitting all over the plant and yard right now that never seems to get back to the saw for processing? Too many. What if you told your team you wanted to reduce waste by 50% in the next year; what kind of reaction would you get? You might finally be on the right track to finding out how the waste is produced and why it is not getting back into the system for processing into fire blocks, vent blocks, floor truss verticals, wedges, etc.
This bold objective could force your supervision team to think differently about this enormous waste they are walking past every day. They could no longer pick around the edges looking for incremental improvements and expect to meet this bold objective. They would have to do a “deep dive” to find root causes and improve processes. It gets rid of the mindset of “we have always done it this way” and forces us to use a better process of attacking scrap.
Why stop here? What about WIP, finished goods, etc.? You may only be able to work on a few initiatives at a time, but each move will save you money, and change the culture of your team to a continuous improvement environment.
Set the Expectation
As the Owner/Executive/GM, you must set high expectations and then follow up. Otherwise, you cannot think there will be lasting improvement.
There is always room to improve, and the discussion above is simply one example. I’ve never been in a plant where there were zero process failures and no material to be reworked or rerun, etc. When we communicate the expectations, and show the same in action every day, then we help to set the mindset of a CI organization. We need to focus our improvement efforts based on the biggest opportunities, and make sure our managers are keeping score, communicating on a common board so everyone will know if we’re winning or losing.
The other change you will see is your leadership team will have established a different way of thinking, a different way of behaving, a different way of using the tools to focus on the most important things first. You will have a different way of communicating with your associates on improving their processes, helping to eliminate all the reasons why the sawyers and forklift operators or framers and assemblers have a bad day, and you will establish a new level of trust and respect across the operation. This is part of the work I enjoy most with our industry, helping to create that new culture while sharing ideas to grow and increase profits.
If you can start this, and sustain it in 2018, then you will create the culture of winning and being the best. And your competitor, well, they will never get close enough to see your tail lights ahead of them.
Best Practice Tip
I always coach managers and supervisors to have a huddle at the beginning of a shift. This came to life for me a different way recently. A manager at the hotel where I was staying asked what I did, and I shared how I work with companies to improve efficiency, improve the bottom line, and help grow their business. She wanted a simple way to implement this with her staff. I walked her through how to conduct the huddle at the beginning of the shift, to share expectations, share highlights of best performance, offer a safety tip, and discuss a problem and how they could improve. This photo is of their first meeting as a team. Now four weeks later, she has let me know that they have seen improvements in their ratings on surveys, improvement in morale, and improvement in overall team performance. If you are not doing this today, start tomorrow; and if you need help, give me a call, I would enjoy the opportunity to assist you.
Ben Hershey is CEO of 4Ward Consulting Group, LLC, the expert leaders turn to. Providing Management and Manufacturing Consulting to the Structural Component and Lumber Industry. A Past President of SBCA, he has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past seven years. He is highly recommended by customers and leaders throughout the industry. You can reach Ben at ben@4WardConsult.com or 623-512-6770.